BILL NUMBER: SB 1766	CHAPTERED  09/18/00

	CHAPTER   456
	FILED WITH SECRETARY OF STATE   SEPTEMBER 18, 2000
	APPROVED BY GOVERNOR   SEPTEMBER 14, 2000
	PASSED THE SENATE   AUGUST 28, 2000
	PASSED THE ASSEMBLY   AUGUST 25, 2000
	AMENDED IN ASSEMBLY   AUGUST 23, 2000
	AMENDED IN ASSEMBLY   AUGUST 8, 2000
	AMENDED IN SENATE   MARCH 28, 2000

INTRODUCED BY   Senator Chesbro
   (Coauthors:  Assembly Members Shelley and Strom-Martin)

                        FEBRUARY 23, 2000

   An act to amend Section 124900 of the Health and Safety Code,
relating to clinics.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 1766, Chesbro.  Primary care clinics.
   Existing law requires the reimbursement of selected primary care
clinics for the delivery of medical services, including preventive
health care and smoking prevention and cessation health education, to
eligible beneficiaries whose income is under 200% of the federal
poverty level.  Existing law requires the State Department of Health
Services to develop a formula for the allocation of funds available
for this purpose.  Existing law requires the department, in the
2001-02 fiscal year, to allocate available funds based on a selected
clinic's reported levels of uncompensated care.
   This bill would require, instead, that the department allocate
available funds as provided under the bill.  The bill would provide
that this requirement shall become inoperative on July 1, 2004.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 124900 of the Health and Safety Code is amended
to read:
   124900.  (a) (1) The State Department of Health Services shall
select primary care clinics that are licensed under paragraph (1) or
(2) of subdivision (a) of Section 1204, or are exempt from licensure
under subdivision (c) of Section 1206, to be reimbursed for
delivering medical services, including preventative health care, and
smoking prevention and cessation health education, to program
beneficiaries.
   (2) Except as provided for in paragraph (3), in order to be
eligible to receive funds under this article a clinic shall meet all
of the following conditions, at a minimum:
   (A) Provide medical diagnosis and treatment.
   (B) Provide medical support services of patients in all stages of
illness.
   (C) Provide communication of information about diagnosis,
treatment, prevention, and prognosis.
   (D) Provide maintenance of patients with chronic illness.
   (E) Provide prevention of disability and disease through
detection, education, persuasion, and preventive treatment.
   (F) Meet one or both of the following conditions:
   (i) Are located in an area federally designated as a medically
underserved area or medically underserved population.
   (ii) Are clinics that are able to demonstrate that at least 50
percent of the patients served are persons with incomes at or below
200 percent of the federal poverty level.
   (3) Notwithstanding the requirements of paragraph (2), all clinics
that received funds under this article in the 1997-98 fiscal year
shall continue to be eligible to receive funds under this article.
   (b) As a part of the award process for funding pursuant to this
article, the department shall take into account the availability of
primary care services in the various geographic areas of the state.
The department shall determine which areas within the state have
populations which have clear and compelling difficulty in obtaining
access to primary care.  The department shall consider proposals from
new and existing eligible providers to extend clinic services to
these populations.
   (c) Each primary care clinic applying for funds pursuant to this
article shall demonstrate that the funds shall be used to expand
medical services, including preventative health care, and smoking
prevention and cessation health education, for program beneficiaries
above the level of services provided in the 1988 calendar year or in
the year prior to the first year a clinic receives funds under this
article if the clinic did not receive funds in the 1989 calendar
year.
   (d) (1) The department, in consultation with clinics funded under
this article, shall develop a formula for allocation of funds
available.  It is the intent of the Legislature that the funds
allocated pursuant to this article promote stability for those
clinics participating in programs under this article as part of the
state's health care safety net and at the same time be distributed in
a manner that best promotes access to health care to uninsured
populations.
   (2) The formula shall be based on both of the following:
   (A) A hold harmless for clinics funded in the 1997-98 fiscal year
to continue to reimburse them for some portion of their uncompensated
care.
   (B) Demonstrated unmet need by both new and existing clinics, as
reflected in their levels of uncompensated care reported to the
department.  For purposes of this article, "uncompensated care" means
clinic patient visits for persons with incomes at or below 200
percent of the federal poverty level for which there is no
encounter-based third-party reimbursement which includes, but is not
limited to, unpaid expanded access to primary care claims and other
unreimbursed visits as verified by the department according to
subparagraph (A) of paragraph (5).
   (3) In the 1998-99 fiscal year, the department shall allocate
funds for a three-year period as follows:
   (A) If the funds available for the purposes of this article are
equal to or less than the prior fiscal year, clinics that received
funding in the prior fiscal year shall receive 90 percent of their
prior fiscal year allocation, subject to available funds, provided
that funding award is substantiated by the clinics' reported levels
of uncompensated care.  The remaining funds beyond 90 percent shall
be awarded in the following order:
   (i) First priority shall be given to clinics that participated in
the program in prior fiscal years, withdrew from the program due to
financial considerations, were subsequently categorized as "new
applicants" when they reapplied to the program, and received a
significantly reduced allocation as a result.  These clinics shall be
awarded 90 percent of their allocation prior to their withdrawal
from the program, subject to available funds, provided that award
level is substantiated by the clinic's reported levels of
uncompensated care.
   (ii) Second priority shall be given to those clinics that received
program funds in the prior year and continue to meet the minimum
requirements for funding under this article.  In implementing this
priority, the department shall allocate funds to all eligible
previously funded clinics on a proportionate basis, based on their
reported levels of uncompensated care, which may include, but is not
limited to, unpaid expanded access to primary care claims and other
unreimbursed patient visits, as verified by the department according
to subparagraph (A) of paragraph (5).
   (B) If funds available for the purposes of this article are equal
to or less than the prior fiscal year, only those clinics that
received program funds in the prior fiscal year may be awarded funds.
  Funds shall be awarded in the same priority order as specified in
clauses (i) and (ii) of subparagraph (A).
   (C) If funds available for purposes of this article are greater
than the prior fiscal year, clinics that received funds in the prior
fiscal year shall be awarded 100 percent of their prior fiscal year
allocation, provided that funding award level is substantiated by the
clinic's reported levels of uncompensated care.  Remaining funds
shall be awarded in the following priority order:
   (i) First priority shall be given to clinics that participated in
the program in prior fiscal years, withdrew from the program due to
financial considerations, were subsequently categorized as "new
applicants" when they reapplied to the program, and received a
significantly reduced allocation as a result.  These clinics shall be
awarded 100 percent of their allocation prior to their withdrawal
from the program, provided that award level is substantiated by the
clinic's reported levels of uncompensated care.
   (ii) Second priority shall be given to new and existing applicants
that meet the minimum requirements for funding under this article.
In implementing this priority, the department shall allocate funds to
all eligible previously funded clinics on a proportionate basis,
based on their reported levels of uncompensated care, which may
include, but is not limited to, unpaid expanded access to primary
care claims and other unreimbursed patient visits, as verified by the
department, according to subparagraph (A) of paragraph (5).
   (4) In the 2001-02 fiscal year, and subsequent fiscal years, the
department shall allocate available funds, for a three-year period,
as follows:
   (A) Clinics that received funding in the prior fiscal year shall
receive 90 percent of their prior fiscal year allocation, subject to
available funds, provided that the funding award is substantiated by
the clinics' reported levels of uncompensated care.
   (B) The remaining funds beyond 90 percent shall be awarded to new
and existing applicants based on the clinic's reported levels of
uncompensated care as verified by the department according to
subparagraph (B) of paragraph (5).  The department shall seek input
from stakeholders to discuss any adjustments to award levels that the
department deems reasonable such as including base amounts for new
applicant clinics.
   (C) New applicants shall be awarded funds pursuant to this
subdivision if they meet the minimum requirements for funding under
this article based on the clinics' reported levels of uncompensated
care as verified by the department according to subparagraph (B) of
paragraph (5).  New applicants include applicants for any new site
expansions by existing applicants.
   (D) The department shall confer with clinic representatives to
develop a funding formula for the program implemented pursuant this
paragraph to use for allocations for the 2004-05 fiscal year and
subsequent fiscal years.
   (E) This paragraph shall become inoperative on July 1, 2004.
   (5) In assessing reported levels of uncompensated care, the
department shall utilize the most recent data available from the
Office of Statewide Health Planning and Development's (OSHPD)
completed analysis of the "Annual Report of Primary Care Clinics."
   (A) In the 1998-99 to 2000-01 fiscal years, inclusive, clinics
shall submit updated data regarding the clinic's levels of
uncompensated care to the department with their initial application,
and for each of the two remaining years in the three-year application
period.  The department shall compare the clinic's updated
uncompensated care data to the OSHPD uncompensated care data for that
clinic for the same reporting period.  Discrepancies in
uncompensated care data for any particular clinic shall be resolved
to the satisfaction of the department prior to the award of funds to
that clinic.
   (B) In the 2001-02 fiscal year, and subsequent fiscal years,
clinics may not submit updated data regarding the clinic's levels of
uncompensated care.  The department shall utilize the most recent
data available from OSHPD's completed analysis of the "Annual Report
of Primary Care Clinics."
   (C) If the funds allocated to the program are less than the prior
year, the department shall allocate available funds to existing
program providers only.
   (6) The department shall establish a base funding level, subject
to available funds, of no less than thirty-five thousand dollars
($35,000) for frontier clinics and Native American reservation-based
clinics.  For purposes of this article, "frontier clinics" means
clinics located in a medical services study area with a population of
fewer than 11 persons per square mile.
   (7) The department shall develop, in consultation with clinics
funded pursuant to this article, a formula for reallocation of unused
funds to other participating clinics to reimburse for uncompensated
care.  The department shall allocate the unused funds to other
participating clinics to reimburse for uncompensated care.
   (e) In applying for funds, eligible clinics shall submit a single
application per clinic corporation.  Applicants with multiple sites
shall apply for all eligible clinics, and shall report to the
department the allocation of funds among their corporate sites in the
prior year.  A corporation may only claim reimbursement for services
provided at a program-eligible clinic site identified in the
corporate entity's application for funds, and approved for funding by
the department.  A corporation may increase or decrease the number
of its program-eligible clinic sites on an annual basis, at the time
of the annual application update for the subsequent fiscal years of
any multiple-year application period.
   (f) Grant allocations pursuant to this article shall be based on
the formula developed by the department, notwithstanding a merger of
one of more licensed primary care clinics participating in the
program.
   (g) A clinic that is eligible for the program in every other
respect, but that provides dental services only, rather than the full
range of primary care medical services, shall only be eligible to
receive funds under this article on an exception basis.  A
dental-only provider's application shall include a Memorandum of
Understanding (MOU) with a primary care clinic funded under this
article.  The MOU shall include medical protocols for making
referrals by the primary care clinic to the dental clinic and from
the dental clinic to the primary care clinic, and ensure that case
management services are provided and that the patient is being
provided comprehensive primary care as defined in subdivision (a).
   (h) (1) For purposes of this article, an outpatient visit shall
include diagnosis and medical treatment services, including the
associated pharmacy, X-ray, and laboratory services, and prevention
health and case management services that are needed as a result of
the outpatient visit.  For a new patient, an outpatient visit shall
also include a health assessment encompassing an assessment of
smoking behavior and the patient's need for appropriate health
education specific to related tobacco use and exposure.
   (2) "Case management" includes, for this purpose, the management
of all physician services, both primary and specialty, and
arrangements for hospitalization, postdischarge care, and followup
care.
   (i) (1) Payment shall be on a per visit basis at a rate that is
determined by the department to be appropriate for an outpatient
visit as defined in this section, and shall be not less than
seventy-one dollars and fifty cents ($71.50).
   (2) In developing a statewide uniform rate for an outpatient visit
as defined in this article, the department shall consider existing
rates of payments for comparable outpatient visits.  The department
shall review the outpatient visit rate on an annual basis.
   (j) Not later than May 1 of each year, the department shall adopt
and provide each licensed primary care clinic with a schedule for
programs under this article, including the date for notification of
availability of funds, the deadline for the submission of a completed
application, and an anticipated contract award date for successful
applicants.
   (k) In administering the program created pursuant to this article,
the department shall utilize the Medi-Cal program statutes and
regulations pertaining to program participation standards, medical
and administrative recordkeeping, the ability of the department to
monitor and audit clinic records pertaining to program services
rendered to program beneficiaries and take recoupments or recovery
actions consistent with monitoring and audit findings, and the
provider's appeal rights.  Each primary care clinic applying for
program participation shall certify that it will abide by these
statutes and regulations and other program requirements set forth in
this article.
